Mortgage Rates Hold Ground as Oil Prices Slide

[Joseph Scorese]

Mortgage Rates Hold Ground as Oil Prices Slide

Mortgage rates held their ground fairly well today, despite moderate weakness in underlying bond markets (which normally translates to higher rates). Many lenders were right in line with yesterday's latest offerings while some were just slightly higher. That said, any day-over-day change in rates would be seen in the form of closing costs as opposed to the contract rate itself.
There was no significant theme in markets today as there were no significant economic releases.

The most notable motivation was the sharp drop in oil prices after an inventory report this morning. This was very likely the deciding factor in bond markets being able to hold their ground. In other words, lenders may have raised rates in the middle of the day had it not been for the slide in oil prices. This isn't to suggest that oil prices will always have a positive correlation with rates, but big, intraday moves in oil frequently have an effect on broader financial markets.

Overall, rates continue to operate near their 4-month lows, with only 2-3 days seeing anything better over that time. The most prevalently-quoted conventional 30yr fixed rate for top tier scenarios remains 3.875% with a few lenders an eighth of a percentage point higher, and fewer still at 3.75%.